President, Pakistan Businessmen and Intellectuals Forum (PBIF), Mian Zahid Hussain, has said that many free trade agreements have proved to be counterproductive and against the national interests but nobody was blamed and satisfactory steps were not taken to fix the issue. He also pointed towards structural weaknesses, policy hiccups, high transaction cost, lack of infrastructure, and improper mechanism to safeguard local export industry as many sectors are at the mercy of international market.
He noted that non-payment of refunds had damaged the competitiveness of export sector and pushed up cost of doing business at a time when cost of production in Bangladesh, Indian and Vietnam was less than Pakistan due to cheap electricity. "Our investment laws are very liberal but it's not helping as more and more investors continue to prefer trading over manufacturing which doesn't require heavy investment and space," he added.
The rise of stock market, commodity market and land market also reduced interest in manufacturing sector while there is no bank in the country to support industrial sector, he observed. "Commercial banks continue to prefer investment in government papers and avoid industrial sector which is a reason behind fall of manufacturing, which is considered as backbone of economy in many developed nations," said Hussain.
He also expressed concern over continued fall in exports and said that exports had slipped from 25.3 billion in 2011 to 22 billion in 2015 which shows a drop of three percent in comparison to the GDP. Hussain said that country used to spend 11.3 percent of the GDP on debt servicing in 2008 which had now swelled to 19.1 percent due to unprecedented loans. He said that fall in exports can be attributed primarily to its non-competent department, decade-long energy crisis, rising cost of production, political uncertainty, ignoring value-addition and preferring export of raw material, and inability to capitalise on GSP Plus.
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